Spencer v. Barber

Decision Date09 September 2011
Docket NumberNo. 29,390.,29,390.
CourtCourt of Appeals of New Mexico
PartiesHerman SPENCER, Third–Party Plaintiff/Appellant,v.Paul BARBER and Barber & Borg, LLC, Third–Party Defendants/Appellees,andEllen Sam, as Personal Representative of the Estate of Hermanda Spencer (Deceased), Plaintiff/Counter–Defendant/Appellee,v.Herman Spencer, Defendant/Counter–Plaintiff/Appellant.

OPINION TEXT STARTS HERE

Luebben Johnson & Barnhouse, LLP, Randolph H. Barnhouse, Kelli J. Keegan, Los Ranchos de Albuquerque, NM, for Appellant.Madison, Harbour & Mroz, P.A., M. Eliza Stewart, Jacqueline Olexy, Albuquerque, NM, for Appellees.

OPINION

FRY, Judge.

{1} This case evolved from a wrongful death action filed by Plaintiff Ellen Sam as personal representative of the estates of her daughter, Hermanda Spencer, and her granddaughter, Lydia Burnett. Through her attorneys, third-party Defendants Paul Barber and the law firm of Barber & Borg, LLC (collectively Barber), Sam entered into a settlement agreement with decedent Hermanda Spencer's father, Defendant Herman Spencer (Spencer), concerning Spencer's entitlement to proceeds from the wrongful death case. Spencer later repudiated the settlement agreement, Sam sued Spencer for enforcement of the agreement, and Spencer filed a third-party complaint against Barber, claiming that Barber wrongfully induced Spencer to sign the agreement and that he breached duties owed to Spencer as a statutory beneficiary of the wrongful death estates.

{2} The district court granted Barber's motion for summary judgment and, in accordance with Leyba v. Whitley, 120 N.M. 768, 907 P.2d 172 (1995), held that any duties Barber may have owed Spencer as a statutory beneficiary ended when an adversarial relationship developed between Sam and Spencer. We agree with this determination and affirm summary judgment on this issue. The district court also granted summary judgment on the question of the enforceability of the settlement agreement between Sam and Spencer and held that the agreement was enforceable. We conclude that issues of material fact precluded summary judgment on this issue and reverse this aspect of the district court's judgment.

BACKGROUND

{3} Sam retained Barber to represent her in the wrongful death action she filed as personal representative of the estates of Hermanda Spencer and Hermanda's daughter, Lydia Burnett. As previously mentioned, Spencer was Hermanda's father and Lydia's grandfather. It is undisputed that both Sam and Spencer were potential statutory beneficiaries of both estates pursuant to the Wrongful Death Act, NMSA 1978, Sections 41–2–1 to –4 (1882, as amended through 2001).

{4} Spencer knew nothing about the wrongful death case that Sam was pursuing until nearly a year after it was filed. Sam took the position that Spencer had abandoned Hermanda and was therefore not entitled to share in the proceeds of the estates' ultimate recovery. See Perry v. Williams, 2003–NMCA–084, ¶¶ 20, 22, 133 N.M. 844, 70 P.3d 1283 (holding that a parent who fails to support a child may not benefit from a wrongful death recovery).

{5} Approximately ten months after Barber filed the lawsuit on Sam's behalf, some but not all of the defendants in that case made offers to settle with Sam. Barber located Spencer at his employer's place of business and met with him in order to offer to settle any claims Spencer may have had regarding the wrongful death estates. At the time of this meeting, Barber claimed that he did not know the final settlement amount in the wrongful death case, nor did he know how any settlement would be divided between the two estates. However, Barber did know that two of the defendants in the case had offered to settle for a total of $900,000. Barber told Spencer that he was a lawyer representing Sam in a suit against certain entities for the deaths of Spencer's daughter and granddaughter. He told Spencer that the case was close to settling. Spencer asked Barber how much the settlement was and, according to Spencer, Barber did not say. Barber, on the other hand, recalled telling Spencer that the settlement was “a large or very large amount.”

{6} Barber told Spencer that he was not Spencer's lawyer, and Spencer understood this. Spencer also understood that Sam was Barber's client. Although Barber recalled telling Spencer that he could seek advice from his own lawyer, Spencer did not recall this discussion. Barber recalled telling Spencer that Sam was willing to settle Spencer's potential claims against the estates for $10,000 or $15,000, while Spencer recalled Barber initially offering $10,000, plus release of Spencer's obligation to pay child support, which amounted to approximately $14,000. Spencer asked if he could get $20,000 plus release of the child support obligation, which was apparently being garnished from Spencer's wages. Barber responded that he would have to ask Sam for authority to do this. A short time later, Sam agreed to settle with Spencer for $20,000, plus forgiveness of Spencer's child support obligation.

{7} Barber produced a settlement agreement for Spencer's signature. Spencer had an opportunity to read the agreement and, according to Barber, he said he understood it and had no questions. Spencer agreed to the settlement of $20,000, plus forgiveness of the child support obligation, and he and Barber agreed to meet again after lunch so that Spencer could sign the settlement agreement before a notary. After lunch, Spencer and Barber went to the office of attorney Robert Ionta, where Spencer signed the agreement before a notary.

{8} Barber told Spencer it would take at least 30 days for the settlement in the underlying case to be finalized and for the money to become available. A few weeks later, Spencer received in the mail a copy of the settlement agreement he had signed and, a few days later, a check in the amount of $20,000. Between the time Spencer met with Barber and the time he received the agreement and the check, Spencer thought he had made a deal with Barber. However, once he received the agreement, Spencer wanted to make sure he was “doing it right,” so he called attorney William Keeler. After talking to Keeler, Spencer decided not to accept the check. Keeler sent a letter to Barber asking him not to distribute the settlement proceeds in the underlying case until it could be determined how much of that settlement Spencer was entitled to.

{9} In the meantime, according to Barber, Sam relied on Spencer's settlement of his claims against the estates in agreeing to settle with the defendants in the underlying case. In fact, later the same day as his meeting with Spencer, Barber emailed the attorneys for the defendants in the underlying case and accepted settlement offers totaling $900,000. In addition, Barber, on Sam's behalf, asked the Navajo Nation Child Support Department for the forms necessary to effectuate a waiver of child support from Spencer.

{10} After Spencer repudiated the settlement agreement he had signed, Sam filed suit against Spencer seeking a declaration that the agreement was binding. Spencer then filed a counterclaim against Sam and a third-party complaint against Barber and his law firm. In the third-party complaint, Spencer alleged that Barber deceived Spencer and induced him into signing the settlement agreement and that Barber breached duties owed to Spencer as a beneficiary of the wrongful death estates.

{11} Barber filed a motion for summary judgment on Spencer's third-party claims and sought a determination that the settlement agreement was enforceable and that Spencer breached the settlement agreement. Barber's primary argument was that the undisputed facts established the existence of all elements of an enforceable contract. Spencer responded and argued that Barber breached various duties he owed to Spencer, including (1) a duty to disclose, (2) a duty of reasonable care owed as the attorney for the wrongful death estates, (3) a duty to deal fairly and honestly in contract formation, and (4) a duty to protect Spencer's interests in the wrongful death estates. Spencer further argued that the settlement agreement was unenforceable because (1) Barber misrepresented an essential term of the agreement, (2) Spencer was mistaken as to a basic assumption underlying the agreement, and (3) the agreement was a contingent contract that was canceled before the contingencies were met. Barber's reply brief argued that Spencer understood the settlement agreement, bargained for more favorable terms, and willingly signed the agreement of his own volition. Barber further argued, in reliance on Leyba, 120 N.M. 768, 907 P.2d 172, that even if he owed Spencer a duty as a beneficiary of the wrongful death estates, the adversarial relationship between Spencer and Barber's client, Sam, terminated that duty.

{12} Without holding a hearing, the district court entered an order granting summary judgment in favor of Barber. The court concluded that there was no genuine issue of material fact and that (1) Barber did not owe a duty to Spencer because of the adversarial relationship between Spencer and Sam, and (2) the settlement agreement between Sam and Spencer was enforceable. The court held that Spencer's recovery for the death of Hermanda Spencer was limited to that allowed under the terms of the settlement agreement. This appeal followed.

DISCUSSION

{13} “Summary judgment is appropriate where there are no genuine issues of material fact and the movant is entitled to judgment as a matter of law.” Self v. United Parcel Serv., Inc., 1998–NMSC–046, ¶ 6, 126 N.M. 396, 970 P.2d 582. We review these legal questions de novo.” Id.

{14} Spencer makes three primary arguments on appeal. First, he maintains that the district court improperly determined that Leyba barred his claims against Barber. Second, he contends that the settlement agreement was unenforceable for a number of reasons. Third, he claims...

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2 cases
  • Spencer v. Barber
    • United States
    • Supreme Court of New Mexico
    • February 28, 2013
    ...Sam. {3} Spencer appealed, and the Court of Appeals affirmed in part and reversed in part. Spencer v. Barber, 2011–NMCA–090, ¶ 2, 150 N.M. 519, 263 P.3d 296. The Court of Appeals agreed that Spencer could not sue Barber for malpractice because Spencer became Sam's adverse party, thereby neg......
  • Spencer v. Paul Barber, Barber & Borg, L.L.C.
    • United States
    • Supreme Court of New Mexico
    • April 29, 2013
    ...Sam.{3} Spencer appealed, and the Court of Appeals affirmed in part and reversed in part. Spencer v. Barber, 2011-NMCA-090, ¶ 2, 150 N.M. 519, 263 P.3d 296. The Court of Appeals agreed that Spencer could not sue Barber for malpractice because Spencer became Sam's adverse party, thereby nega......

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